BoD Tim fireworks on Wednesday 2 March. The Italian telecommunications group has approved the 2021 accounts and the 2022-24 business plan. The 2021 budget closes in the red for 8,7 billion after 4,1 billion in write-downs and deferred tax assets of 3,8 billion, forcing the Board to renounce the distribution of the dividend to shareholders.
The clean-up of the balance sheet now allows Tim to face the new challenges of the industrial plan with greater confidence: the group is the forerunner and, the first in Europe, to abandon the vertically integrated group structure with the division into two separate entities, one for the network and the other for services. It is the antechamber of the project by “single network” with Open Fiber which will be on the table today of the CDA of Cassa Depositi e Prestiti. And the baptism of the new CEO who obtained unanimous approval from the directors, under the guidance of Salvatore Rossi. It still remains on standby Opa's offer presented by the Kkr fund but the evaluation of the proposal "will be completed quickly". However, if the single grid project goes through, it will be more difficult for Kkr to complete its project and the market has already considered that the takeover bid could vanish.
The first countermeasures arrived immediately: "strong attention to costs" and the sale of the towers. Inwit is preparing to leave the perimeter of the group and the Tim Board has examined the offer presented by the Ardian fund for the acquisition of the indirect stake held by Tim in Inwit, as the rumors of the last few days had let us understand. Offer deemed friendly and which could bring 1,4 billion in cash. Finally, it was decided to convene an ordinary and extraordinary shareholders' meeting for 7 April which will have to pronounce on the settlement of losses, on the stock options plan and the co-optation of CEO Pietro Labriola on the board of directors, following the departure of Luigi Gubitosi.
“I am convinced that the evolution of the Group we have designed – comments the CEO Pietro Labriola – represents a positive discontinuity. We are playing a front-runner role in the Telco industry and expect others to follow suit. With this new set-up we will be more ready to respond to the challenges and seize the opportunities that lie ahead”.
Board Tim, the industrial plan launches the separation of network and services
It was, together with the 2021 accounts, the most awaited theme. The decision to abandon the vertically integrated group organization opens the door to the birth of the single network. The executive project – states the note released late in the evening by Tim – will be presented to the market before June 30, on the occasion of TIM's Capital Market Day within the half-yearly report.
Also for this reason, Tim limited himself to presenting the new configuration in the essential lines, limiting himself to indicating the division into two "legal entities".
ServCo: mobile network and services for businesses and consumers
SerCo it will have mobile network assets as well as commercial services for businesses and consumers. The business segment, aimed at the public administration and large groups, will be integrated with Noovle, Olivetti and Telsy. On the consumer side, we will continue to focus on convergence and strengthening the Premium positioning. Tim Brasil is placed in ServCo and will benefit from the integration with Oi, after the definitive go-ahead for the acquisition obtained by the Brazilian Antitrust in February.
NetCo: landline, domestic wholesale and Sparkle
This is the new entity for the fixed network, where Tim's access network will end up together with Sparkle's international connections. Tim can now count on 94% of lines in FTTC (Fiber to the cabinet) technology and aims at a growing shift of customers to FTTH (Fiber to the home). The intention is to accelerate FiberCop's plans, also in co-investment, to reach 60% of the lines covered in FTTH by 2026. This acceleration will lead to the peak of domestic investments in 2022, followed by a progressive decline within 15% of revenues in the medium term.
Board of Directors Tim, the financial targets of the 2022-24 plan
The financial targets of the 2022-24 plan - with unchanged organizational structure - envisage a slight improvement in revenues over the three-year period; Stable group Ebitda, Group Capex at 4 billion in 2022, 3,9 billion in 2023 and 3,8 billion in 2024. Group net debt will be affected by the one-time 3,7 billion for the acquisition of frequencies in Italy and Brazil and for the acquisition of Oi, the impact of which will be completely exhausted in 2025.
Board Tim, the 2021 accounts close in the red
Group revenues closed 2021 slightly down at 15,3 billion (-1,9%). Organic Ebitda decreased by 9,6% to 6,2 billion. Net financial debt after lease stops at 17,6 billion, down by €1 billion "despite investments up 14,1% YoY to accelerate the development of fibre, cloud and football streaming", notes Tim .
The fourth quarter recorded a drop in revenues of 4,4%, an organic EBITDA down by 21,9% and a reduction in investments of 3,8%.
On the basis of these data, the Board of Directors has decided to waive the distribution of the dividend for 2021.
Board Tim, Ardian wants all 30% of Inwit
Tim has received Ardian's binding offer for the purchase of the majority of the Daphne 3 holding which owns 30,2% of Inwit. Tim holds 51% of Daphne 3, while a consortium of investors led by Ardian has the remaining 49%. 33,2% of Inwit is held by Vantage Tower which belongs to the Vodafone Group and is the largest infrastructure platform in Europe with over 68.000 towers in nine markets. 3% is owned by Canson (Matteo Canonaco, co-founder of Canson Capital Partners) and 33,6% is free float.
Updates
The offer of the Ardian fund for Inwit is for "41% of Daphne 3, if we accept we would remain at 10% of the holding and in the governance". This was clarified by Adrian Calaza, CFO of Tim, in the conference call with analysts
(Updated on Thursday, March 3, 2022 at 17:46pm)
